FLIGHT International, 21 Inly 1979 157
Air [rgnsp-rj
lata discusses second round of increases
LESS than four months after agreeing
fuel-related fare surcharges, more
than 60 member airlines of the Inter
national Air Transport Association
are meeting this week in Geneva to
agree on further increases, following
the latest round of Opec oil price
rises (Flight, July 7, page 5).
This threatens to push fuel prices up
to the $1 a gallon mark. Even before
the latest increases, lata members
experienced an average 27 per cent
rise in fuel prices (to 65c a gallon)
between the first and second quarters
of this year. For 1979 as a whole, the
average jet fuel price may end up
some 70 per cent higher than last
year's figure.
Against this background, lata mem
bers are discussing increases in fares
and cargo rates which range between
10-15 per cent, to apply from October
1. Last April, the Association agreed
surcharges ranging between five and
seven per cent (Flight, April 14, page
1132) but after submission to govern
ments these were knocked back to
between four and five per cent (the
US Civil Aeronautics Board1 took a
particularly hard line on increases).
This time, effective increases of eight
to ten per cent will just about cover
the latest fuel price rise, but will not
recoup losses incurred earlier this
year.
By December, lata estimates that
its members' average operating costs
will have been pushed up by 16 per
cent, over the previous 12 months,
as a result of fuel price increases
alone. Added to this will be the effect
of fuel-related inflation, which will
really begin to affect most other costs
next year. Fuel, as a proportion of
total operating costs, will rise to more
than 25 per cent by the end of the
year, compared with 22 per cent in
March.
• An indication of the effect fuel
prices are having on costs is given
by British Airways' fuel costs over
the last two financial years, followed
by their forecast figure for the cur
rent year. The respective figures are
£224 million, £300 million and £450
million. However, despite the un
favourable world supply/demand fuel
situation, both BA and British Cale
donian say that they are not having
to cut any schedules. BA quotes the
US East coast, India, the Far East and
South Africa as the areas where fuel
reserves appear to be marginal.
TWA says that recent Opec price
rises will increase its total fuel bill
by 42 per cent over 1978 to $675 mil
lion this year. The airline is to cut
routes equivalent to one per cent of
its total capacity from the end of the
summer due to fuel shortages and
price rises.
A twice-weekly service between
Boston and the Azores, and a thrice-
weekly service between Lisbon and
Casablanca, and between Barcelona
and Nice, will be ended from October
8, as will a daily flight between New
York and Shannon from October 28.
Fuel prices in the cities affected
averaged 89 cents a gallon on July 1
compared with 51 cents a gallon six
months ago. To operate the suspended
services, TWA will have to buy on
the spot market at prices over $1-25
a gallon which, it believes, is not
economically justifiable. TWA is re
ducing the number of services flown
by older, less fuel-efficient jets and
its transatlantic schedule cuts are on
routes operated by Boeing 707s.
• Fuel costs for the US domestic
trunk airlines in May, the most recent
month for which figures are pub
lished by the CAB, passed the 50
cents/gallon mark. The average fuel
price for April was 47-11 cents/gal
lon. For March, April and May, the
airlines contended with an eight
cents/gallon rise in their jet fuel
prices, which raised their total fuel
bill by $8,000 million.
A Washington aviation source com
mented: "Fuel prices rather than fuel
availability is the primary worry of
the US airlines these days. This is
just the opposite of US auto drivers,
who seem to pay any price if only
they can fill their empty tanks,"
Boeing delivered the 1,500th 727 to United Airlines on July 2 in a ceremony at the manufacturer's
Seattle plant. United has now received 201 727s and also operates the first one to be built—N7004U.
This has carried an estimated l million passengers and flown a total distance of 18 million miles.
Tu-144 flies again
ON June 23 Moscow Radio reported
that a new version of the Russian
TU-144 supersonic airliner had made
a test flight to the eastern city of
Khabarovsk. So far, this report is the
only one to have come from a Russian
source; there is no confirmation of
the detail as yet from any of the avail
able Soviet news or technical media,
Aeroflot confirmed during Septem
ber last year that they had indefinitely
suspended the Soviet SST's scheduled
operations, apparently for a variety of
technical reasons including its in
adequate payload-range performance.
Must read . . .
Surface Movement and Control Sys
tems, Ioao circular 148-AN/97, Inter
national Civil Aviation Organisation,
Montreal, Canada; US$2.